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Ontario jobs numbers contradict fears about raising the minimum wage

Information from Income Security Advocacy Centre (ISAC): This Labour Day weekend marks eight months since Bill 148, the Fair Workplaces, Better Jobs Act, came into effect. Bill 148 increased the minimum wage from $11.60 to $14.00 an hour, gave all workers access to ten job-protected personal emergency leave days (the first two of which are paid), legislated equal pay for equal work for all workers, and ushered in a host of other changes to both the Labour Relations Act and the Employment Standards Act.

Taken together, these changes amount to the most significant transformation of Ontario labour law in a generation.

The Act was not without opposition. The business lobby warned Ontarians that its passage would cause massive job losses, shutter small businesses and hurt Ontario’s economy. The numbers thus far show that those predictions have failed to materialize.

Business claims about Bill 148

In August 2017, the Ontario Chamber of Commerce commissioned a study by the Canadian Centre for Economic Analysis(CANCEA) that warned that 185,000 jobs would be at risk in Ontario over the next two years as a result of Bill 148. People would either lose their jobs or fewer jobs would be created. Youth employment would decrease by 3%. Wages, hours, jobs and prices would all suffer. As Paul Smetanin, President of CANCEA, stated, “given the significant, sudden and sizable changes it would be remiss to expect that unintended consequences would not follow.” The risks of Bill 148, the report concluded, far outweighed the rewards.

Then last September, the Financial Accountability Office of Ontario released a report stating thata minimum wage hike would “result in a loss of approximately 50,000 jobs (0.7 per cent of total employment), with job losses concentrated among teens and young adults.” The FAO’s study claimed these losses would result from a dip in future hiring – that is, 50,000 fewer jobs would be created in the future.

A few weeks later, TD Bank released a study predicting90,000 jobs would be lost in future job growth. The study predicted “a net reduction in jobs of around 80-90k positions by the end of the decade and a 0.3% increase in Ontario’s Consumer Price Index (relative to business-as-usual levels). The estimated job impacts would still leave employment expanding over the next few years, but at a tepid clip of around 0.5% annually.”

At about the same time, the Fraser Institute released a report arguingthat an increased minimum wage would disproportionately hurt young workers. They predicted “adverse employment effects for young and unskilled workers who, without commensurate improvements in their productivity, will be increasingly priced out of employment opportunities.”

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